UK - Lenders move to take control of Montagu's Linpac

It is reported that Linpac's lenders, which include Deutsche Bank and Lloyds, are unwilling to agree to Montagu's offer, which would require them to write off a substantial amount of the company's £600m debt pile while the buyout house maintains its majority interest.

The alternate proposal would see the banks take a controlling interest in the business whilst taking a smaller write-off on the debt. They are also reportedly planning to raise further capital from external sources to inject into the business.

In 2003 Montagu acquired Linpac in a £860m deal, taking a 60% stake in the business for around £140m. The company is thought to be close to breaching its bankng covenents.

Talks are expected to last through the end of the summer.

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